Why the 2020 spring selling season will be different
Denver real estate will operate different after the middle of 2020 thanks to a new policy passed by the National Association of Realtors in November.
Brokers and agents currently can market a home as a “coming soon” listing for up to 30 days before listing it in the MLS; other brokers and agents market a property privately to their network as a “pocket listing” and never have the intention of putting it in the MLS.
The new “Clear Cooperation” policy, which goes live in Denver May 1, restricts any marketing of a home before putting it into the MLS to just one day. The policy aims to make the market more fluid by limiting how long a broker or agent can advertise a listing “off-market” before advertising it in the MLS and making it available to the whole market.
The new policy should add more clarity to Denver’s real estate market, but does limit a valuable seller tool.
Sellers and agents have legitimate reasons to keep listings off the MLS — to protect the privacy of certain clients and to test marketing — but in recent years some brokers and agents have aggressively ramped up its use, which restricts inventory in a market and limits exposure for homes.
This meant that aside from hiring a brokerage or an agent, homebuyers hire access to unique inventory, which is sometimes the case on a limited basis with a market’s best brokers and agents, but it had become widespread, and, arguably, harmed consumers.
Some brokers and agents began keeping more properties out of the MLS so they could potentially capture the other end of the deal. If a property goes into the MLS, all brokers and agents have a chance to bring a buyer, and thus receive buy-side commission when the deal closes. If a broker keeps it off, just their private network has access, which can limit the market, and sale price, and gives them more clout and control.
So, after one of the busiest Denver real estate seasons in recent memory (as some buyers want to get settled before the wild election year), the Denver market faces this new policy in 2020.
What this means for buyers and sellers
Sellers, if you want to enjoy the benefits of quietly marketing your home, testing pricing and showing condition, you must list early this spring before the policy goes into effect.
While there are pros and cons to the practice, it does give sellers a worry-free way to test the market. They can have their agent drum up demand and get a sense of whether they need to remodel or paint the house to get the number they want should they list.
Once a property hits the MLS, the clock begins ticking — if it doesn’t sell quickly, some buyers think it may be overpriced or in poor condition, which complicates selling.
This opportunity to test the market becomes much more difficult after May 1.
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With the clock ticking on the policy, buyers looking for homes before May 1 should make sure they have a well-connected local agent, as sellers looking to employ the off-market strategy will likely be higher this spring.
Buyers can also choose to do the legwork themselves, which might require visiting individual broker and agent websites, which sometimes list their exclusive “off-market” listings.
Many off-market homes don’t show up on Zillow, Redfin or any other brokerage website, so the only way to find the homes is to network with the broker or agent with the listing.
This is one reason, I cultivate great personal connections with other local agents, particularly in the Cherry Creek area. Other agents know I can get a deal done, which means if they have a chance to choose the agent who they share their pocket listings with, they’ll choose trusted colleagues.
Reach out to me to access full Cherry Creek inventory this fall, firstname.lastname@example.org